RESULTS OF AUDIT

October 31, 2000Audit Report No. 00-046Audit of Final Tax Returns forNortheast Service Center DissolvedSubsidiaries Federal Deposit Insurance Corporation Office of Audits Washington, D.C. 20434 Office of Inspector GeneralDATE: October 31, 2000TO: Mitchell Glassman, DirectorDivision of Resolutions and ReceivershipsFred Selby, DirectorDivision of FinanceFROM: Sharon M. SmithAssistant Inspector GeneralSUBJECT: Audit of Final Tax Returns for Northeast Service Center Dissolved Subsidiaries(Audit Report No. 00-046)This report presents the results of the Office of Inspector General’s (OIG) audit of final taxreturns for subsidiaries that the Federal Deposit Insurance Corporation’s (FDIC) Division ofResolutions and Receiverships (DRR), Northeast Service Center (NESC), dissolved duringcalendar years 1996 through 1998. We performed the audit because of issues raised during oursurvey of the NESC’s management of subsidiaries (audit number 1998-104). During that survey,1we noted that the NESC was delinquent in filing subsidiary tax returns. Because of that surveywork, on December 7, 1998, the OIG issued a management letter informing NESC managementthat final tax returns were delinquent for 114 dissolved subsidiaries.BACKGROUND2The FDIC and the Resolution Trust Corporation (RTC) assumed control of the management anddisposition of the assets of failed financial institutions. In many cases, those failed financialinstitutions owned subsidiaries that provided ...